Are Labor Unions Important for Business Cycle Fluctuations: Lessons from Bulgaria (1999-2016)
Bulgarian Economic Papers (www.bep.bg) from St Kliment Ohridski University of Sofia, Faculty of Economics and Business Administration / Center for Economic Theories and Policies
In this paper we investigate the quantitative importance of collective agreements in explaining uctuations in Bulgarian labor markets. Following Maffezzoli (2001), we introduce a monopoly union in a real-business-cycle model with government sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2016), and compare and contrast it to a model with indivisible labor and no unions as in Rogerson and Wright (1988). We find that the sequential bargaining between unions and firms produces an important internal propagation mechanism, which fits data much better that the alternative framework with indivisible labor.
Keywords: business cycles; general equilibrium; labor unions; indivisible labor; involuntary unemployment. (search for similar items in EconPapers)
JEL-codes: E32 E24 J23 J51 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2019-01, Revised 2019-01
New Economics Papers: this item is included in nep-bec, nep-dge, nep-mac and nep-tra
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Working Paper: Are labor unions important for business cycle fluctuations: lessons from Bulgaria (1999-2016) (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:sko:wpaper:bep-2019-02
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